terry: you're not buying it. that's it for "cost of freedom" block. thanks for joining us. [captioning made possible by fox news channel] captioned by the national captioning institute -- www.ncicap.org -- >> movement on massive extremely expensive health care reformulate last night. there were wee hour changes it a sweeping health care reform bill that will send it to the house for a full debate. not until the house members return to a late summer break. >> and late night concerns, the democrats on board with president obama's number one priority right now and now, the ball is in the senate's court. you'll have a week to get it out of the finance committee. do americans want health care reform and what's it going to cost us? hello, and welcome to america's news headquarters, live from new york for the

next two hours, i'm jamie colby. >> i'm rick folbaum. nice to be with you, jamie. >> nice to see you, rick. >> the bill didn't get any republican support. >> not at all. >> some lawmakers say the legislation could shake up a huge portion of this country's economy. molly henneberg has more from washington. >> hi, rick, hi, jamie, president obama heralded the passage of the bill, the one that had so much debate around it ap said the u.s. should, quote, build upon the historic consensus that's been forged. the president put out a statement today, praising the bill, saying it would strengthen consumer protection and choice while lowering costs and improving care. it was a tough flaw for the democrats to get the bill out of the committee because the conservative blue dog democrats raised a number of objections about the cost of a health care overhaul and the impact on small businesses, in the end, enough of the blue dog board and the bill passed. here is what the committee chairman said.

>> i think we passed the bill out that shows that we can bring together conservative, moderate and progressive democrats. we're going to take that coalition on the house floor and i feel confident that we'll pass a health care reform bill in the house when we come back in september. >> it was a close vote though, 31-28. with five blue dog democrats voting with republicans against it. one of their main objections is a provision in the bill creating a government-run insurance plan that republicans in the house and the senate say will undercut private insurance plans. >> their plan for government-run health care would disrupt our current system and millions of americans who enjoy employer-based coverage into a new plan run by government bureaucrats. >> republicans want to allow small businesses to pool resources to buy more affordable health insurance for their employees and they want to give tack breaks to

individuals who ba buy their own health insurance. rick and jamie. >> molly, thanks very much. and chris wallace has some of the big players over the debate over the trillion dollar health care reform package. he's got house ways and means committee chair charlie rangel and south carolina senator jim demint, tune into fox news sunday on the fox broadcast network, check out your local listings for time and channel. >> if you drive a honda, we have a massive safety recall we have to tell, but this morning. honda recalling another 440,000 cars and they say there's potentially a deadly detect with the air bags. this recall includes some 2001 and 2002 accords. 2001 civics, as well 2002 and 2003 acura tl sedans and honda is saying the driver's side air bag inflation device could rupp tour because of too much air pressure. if that happens, metal fragments shoot through the air bags and it could go right

through the car. so far, there's one death and several injuries reported. attributed as well to the defect. and an honest website, hop honda says that the affected owners will receive a recall coming up in the mail the next few months. coming up we'll talk to an auto industry expert just how dangerous the defect is, whether the recall is a black eye for an already ailing auto industry, that's straight ahead. meanwhile, the proponents of cash for clunkers program on capitol hill, they say it's the most efficient thing yet to come out of the government stimulus plan and that it deserves more money. critics are saying it's just another handout for a failing industry and it will take you the taxpayer where it hurts of the caroline shively has more on the story from washington. >> how are you, jamie. if you want cash for your clunker, better head to the dealer right nowment because after this weekend, the billion dollar program may get yanked. the program was supposed to last through the fall, but it was so popular, it blew through that billion in a

week. it works this way. if you trade in your old gas guzzler for a more efficient vehicle you can get up to 4500 bucks, but dealers say submitting the paper work online is a nightmare and since they pay off the rebate on the spot, don't get reimbursed by the government until later, dealers worry they might be on the hook for the money if it runs dry. the house put another 2 billion in the house, but goes to the senate next week, john mccain plans to filibuster bus he and other conservatives say it's just another government handout. >> maybe we should have a cash for cluckers program and pay people to eat chicken and then after that we can have a program to pay people to buy tv's and then a program to pay people to buy lumber. >> well, the clunkers program is working perhaps too well. the rest of the economy shrank, but less than predicted. friday, the government reported that the economy contracted by 1% in the second quarter. better than the 1 1/2% that

was predicted. here is the president's take on it this morning. >> business investments, plummeting in the past few months, showing signs of stabilizing and eventually businesses will start growing and hiring again. >> the president warned the monthly jobs report out next week will show that the country is losing far too many jobs. jamie. >> caroline, thank you so much. much. >> but does the billion dollar car purchase program have more problems under the hood? republican congressman from california is himself a former car dealer and joins us now from d.c. good to talk to you, sir, i know some of your old car dealer budies had the best week than they've had in years and no small part because of this particular program and you voted for it yesterday, putting more money into it. why? >> two reasons, basically. first of all, of all the over trillion dollars of money that has been thrown in the name of stimulus, this is the only thing that has worked. and when it has worked, it's not just worked to sell cars,

when you clear those inventories, factories have to-- dealers will order cars again and factories will start back up and this means jobs and that's what the stimulus is supposed to do. nothing else we've done has done that yet and this is working and this is doing it and that's really the main reason, also, it's not money going to bureaucrats, it's money going back in the economy to taxpayers, basically. >> what about some of your republican colleagues who don't like this program, like from your home state of california, congressman jerry lewis who says this is not exactly what the government is supposed to be doing. it's another example of big government, sort of reaching into the private sector, the program not being run efficiently, there was so much confusion this week over how much money was left in the kitty, well, was it going to run out? all of the emergency meetings that would take place over the last 24 to 48 hours, what do you say to critics on your side of the aisle who don't like this? >> rick, congressman lewis is

right in it not being run efficiently, that's true. there's foe no question about that aspect of it. but the money, the extra 2 billion dollars that we voted on yesterday, is coming out of the stimulus program so that mean was going to be spent. it would be spent on some thing that hasn't been working like most the other stuff in the stimulus program or this. so, i think we're actually diverting money from something that's not working to something that is working. and second of all, you know, what's the worst part of this economy? the things that have really dragged this economy into recession which always does is housing and cars and we will not come out of this recession unless housing and cars at least stabilize. i think what this is going to do is help to stabilize car sales and the car business. you only need to give it a little spurt and people see, instead of their neighbor, who lost their job, they see a neighbor who bought a new car and it encourages them a little more and i think that you get this market jump started and it will take care

of itself after a month or so. >> where does it end, congress patton campbell. we saw in caroline's setup piece, we saw one of your colleagues making jokes about trading in your old chickens and how about a program to trade in your old television sets? i mean, what about other industries, other kinds of businesses coming forward and saying, hey, we'd like the same deal? >> right, and i understand that, except that i think we ought to do it for two industries, we ought to do it for housing, both new and existing housing and for cars, because those are the two b biggest employers and the two industries that have brought the rest of the economy down with them. chickens and tv's and those other things will do fine if the economy lifts up, if the economy will not lift up until we get some more employment, and some more activity and some stabilization. both in the housing market and in the car market. and when you consider that we're talking about 3 billion dollars, that's a lot of money, i understand, but relative to the 830 billion

that was in the stimulus package, which is being thrown out there, in all kinds of things like crazy, you've got to say no matter how critical you are of this, you have to admit that this at least is creating more activity at work and better than any of that mon money. >> congressman john campbell, republican of california good to talk to you, thank you for coming in on a saturday. >> thank you, rick, glad to do it. if you're looking to cash in your clunker this weekend, here are things you should know first. the trade in vehicle less than 25 years old. got to be insured, you have to buy a new vehicle and that new car has to have a suggested retail price of less than 45 grand. it has to get at least 22 miles per gallon for passenger cars, 18 miles per gallon for category 1 trucks and you can get a full list of cars that qualify on foxnews.com. >> sad news for some banks. more banks are going under. drying up the fed's insurance fund to the lowest level in 16

years. it's the federal deposit insurance corporation or fdic, they are shutting down a total of five small banks. here is map showing you where, florida, new jersey, ohio, oklahoma and illinois. mutual bank of harvey illinois was the largest bank to close. so far this year, 69 banks have gone out of business and the fdic's insurance fund now stands at 13 billion. that's its lowest point since 1993, and they're the ones that insure your deposits. today is the first day of august, investors are hoping the dow jones industrial average carries its july momentum into the new month. i'd like to give you a little good news. at the close on friday, the dow was at 9,171 points, up almost a percentage point for the week. more than 8 1/2% for the month of july. and july was the fourth month in the past five that the dow finished ahead, stocks are up 4 1/2% since the start of 2009. so, what exactly is going on

here? is the economy really on an upswing? new gross domestic product numbers are out. they came out yesterday and they show the grosse pointe woo woods-- gdp decreased 1% this year and analyst predicted a bigger drop. housing data suggesting the real estate market may be making a comeback. is that enough to declare that the recession is over? joining us now is university of maryland economist, peter morici. >> nice to be with you. >> in the president's address today his weekly address, he says that things are looking up and the recovery act has to lot to do with it. do you agree? >> things are looking better. american companies are making themselves much more efficient globally, so they're in a position to take advantage of asian growth which is-- china is starting to recover. the stimulus package did not have much to do with this.

not much at all. most of that money is not out. the tax cuts that people got. they largely stuffed in their mattresses, but there are positive signs out there. the housing market is stabilizing and prices are stabilizing and we're starting to build a few more homes in the third quarter than we did in the second. >> so there's a lot of stimulus money, just to break it down for people at home. our contraction, basically, the gdp of 1% when it was expected 1 1/2%, doesn't sound all that significant. what does it really mean? are people holding on to more of their money and if they are, what about with the unemployment numbers increasing, could be over 10% very shortly in many places so what would you expect in the next quarter? >> well, it's important to remember that it's not the 1% compared to 1 1/2, but rather the 1% compared to the 6 or so the previous quarter. we would expect that the economy to grow slightly or

stay even. what happened, business spending, the contraction in business spending is dramatically slowed down. we expect businesses now to start investing to exports. we expect to see more housing starts and so forth. and consumers likely will start to spend a little bit more money by the fourth quarter. you know, the savings rate has gone up, but now the consumers have adjusted their savings rate up. they don't have to keep adjusting it up. they've made that change. i would expect that unemployment will continue rising for a while, even if the economy grows simply because the productivity growth. but the job shoeses should go away by the fourth quarter. >> interesting. peter morici, thank you for explaining it to us. when you hear gdp. sometimes it doesn't make sense. thanks. >> you're welcome. >> developing news now from laguardia airport in new york city. terminal c was shut down for several hours this morning after a bomb scare. one man has been taken into custody after police found what looked like a bomb in his

bag. police described the suspect as emotionally deturned and they say that the fake bomb he carried was a bunch of batteries and wires. according to iran state-run media three american hikers were arrested after crossing the border from iraq's kurdish region. the american were detained after they listened-- they refused to listen to warnings from border guards. they contacted a colleague friday and said they mistakenly entered iranian territory and surrounded by troops. the u.s. state department is investigating. >> trial begins today for opposition supporters in iran detained since the country's disputed june elections. about 20 protesters expected to be prosecuted, among those, allegedly shown pictures to the media showing violence waged against them and reports that moderates are charged with trying to topple the

clerical establishment and acting against national security, that's a charge that could carry the death penalty. in venezuela, they are cracking down even harder on their own media outlets because department of the officials have now revoked the licenses of 34 radio stations. it's the latest round of restrictions only adding to the tensions between president chavez and the private media the government citing the failure to renew registration as a reason for the shutdown. >> here is a little good news. warm weather across the country today. meteorologist domenica davis is in the fox weather center where the sun always shines. nice weekend ahead, domenica? >> yeah, we actually have a nice weekend ahead, but we still have storms to contend with. the storms we've been seeing along the northeast coast yesterd yesterday, a little break today. it will be dry and the showers move back in tomorrowment you

can see on the radar, we have a front sitting out here through the middle part of the country and that means the severe weather focus today will be from dallas up to memphis. and not only are we looking at possible severe thunderstorms, but flooding is also going to be an issue for memphis all the way down to parts of dallas. it looks like right in the owner corner of texas, that's where we could see the worst in terms of flash flooding. there is is a look at the radar and the rain is coming down and it's pretty much going to stay like that the majority of the day by the time the front will push out tomorrow. out to the west we're dealing with some extreme heat down to the southwest. really, it will be expected, but in phoenix, 110 today. we have the high and it will stay dangerously hot throughout the weekend. jamie. >> domenica davis, live in the weather center. thanks, domenica. >> it cools down in the pacific northwest where they had record heat during the week this past week. >> yes, i think it's about 40 degrees in here, rick, today.

>> a little chilly, i like it. the taliban released a new code of conduct for fighters, if you can believe that. could this mean a kinder, gentler jihad. >> can't wait to hear neil livingston on that one. we'll hear the latest on three americans, detained along the iraq-iran border. details on what they're doing about it. that's moments away. discover new seafood creations... inspired from around the country at red lobster. from the northeast, try our new maine lobster and crab bake, with garlic-roasted tender maine lobster, jumbo shrimp, scallops, and a full half-pound of snow crab legs. or from the south, try our new orleans... wood-grilled shrimp jambalaya, simmered with creole seasonings.

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>> and welcome back everybody. topping the news right now, the house is now ready to vote on major changes in the way americans get their health care. the house energy commerce committee approved the health care reform bill last night and set up a full floor debate

when lawmakers get that from the august recess and cap increases in the cost of insurance are among the last when the change is made. to satisfy some conservative democrats. >> a defective driver's side air bag is behind a huge car safety recall. honda recalled 440,000 more cars and covered popular models including accord and civics as well as the acura tl sedans made between 2001 and 2003, if the car is affected you should get a notice in the mail and iran is putting a group of post election protesters on trial for rioting today. the semi foreclosure news agen agency is reporting more than 100 people will be tried. hundreds of thousands of iranians took to the street to protest the disputed election of ahmadnejad back in june and police tried to stop the protests, jamie. >> as tensions continue to rise with north korea, u.s. officials are saying that they have successfully tested the missile defense system.

this particular defense has happened on thursday, it was off the coast of hawaii, a short range ballistic missile was fired from the ieldsland of island and shot down by an interceptor missile from the destroyer from the u.s.s. hopper. last month north korea violated sanks by shooting seven ballistic missiles into its water and three american civilians are under arrest in iran after they possibly strayed into the country along the kurdish border. iranian state-run tv reporting they're holding the americans, one a journalist, one a teacher and blogger and one an activist. the u.s. state department is investigating the report. >> rick: the taliban is kidnapping and brainwash young boys into joining their jihad against non-muslims. some of the boys are as young as nine years old and some of them would even live to carry

out suicide bombings. . >> reporter: by the hundreds of thousands, the internal refugees are returning home to the valley. weeks of living in squalid refugee camps and among taliban fighters and pakistani security forces where most people are now behind them. there's a group of boys whose invisible injuries from the recent conflict it won't heal soon. child soldiers of the taliban. the pakistani army say a hundred boys were kidnapped or coerced in the swat valley after evaluation put into three katz, informants, future soldiers or those who showed most potential to be put into the suicide bomber courses. we had the opportunity to sit down with two boys temporarily looked after by the army in swat's largest city. the boys were 13 or 14, but some of the others who are held in a nearby taliban training camp were as young as nine years old. for security, their faces are covered and no names were given. >> they drafted me when i was

working, they told me that i had to go for jihad against the security forces. >> they told us to carry out jihad against the pakistan army because they are not muslims. this is because they're friends with the united states army, who kills a lot of muslims, and you will go to heaven for killing them, even if you have to kill yourself. >> the taliban told us don't listen to anyone, not your father, not your brother, fot your sister. if they get in your way of fighting jihad, it's okay to kill them. . >> these two boys were some of the lucky ones. they escaped. >> myself and two other boys at the camp talked about escaping, i was very squared as the taliban said if we tried to escape they would slaughter us when i had the chance i ran away. >> the u.n. children's agency is now getting involved. >> the government has got in first contact with, you know, self so they can support the children who we understand have been brain washed into becoming either child soldiers

or suicide bombers. >> the challenge is not only to get the boys into programs deal with psychological damage, but it has to be customized to counter what in some cases has been years of member conditioning even before they were trained to fight. in the swat valley, scott heidler, fox news. >> jamie: later in the show, a top terrorism expert is going to tell us about a new code of conduct that's just been released by the proclaimed leader of the taliban. what does that mean to the safety of our troops and could the u.s. be planning to hold talks with the taliban? rick? >> have you googled today. >> jamie: every day. >> rick: pretty much every day. >> jamie: did i do something wrong? >> not at all. we all use google and know how great it is for searching for things online. how much does the internet giant actually know about your personal life? maybe too much information. >> jamie: privacy, sounds that we should be concerned. and actually we are going to take a look at that. that's coming up in just three minutes.

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>> cash for clunkers, started out a success, but quickly ran out of money. it's the bottom of the hour. caroline shively standing by with the top of the news, caroline? >> hi, jamie. even after running out of money, the cash for clunkers rebate program will last through this weekend. it only took a week for the program to blow through nearly all of the 1 billion dollar

budget and the house voted for additional 2 billion dollars to finance the trade in deals that overwhelmed booming car dealers and the senate has not voted, but the white house says the weekend bill will be valid. you're about to look at video just as the fox at the hotel where three americans were staying before iranian officials took them into custody and kurdish officials say they have retained three who strayed into hiking trip. the state department is looking into the matter and the kurdish government washington envoy has confirmed they are in iranian custody and if you're flying anywhere today. pay attention, there will be bad delays at laguardia airport that could affect your flight. one of the main terminals at new york's laguardia airport was evacuated and shut down for three and a half hours and terminal c emptied after a man came in with a suspicious bag. officials determined it was a fake bomb. the map man is under arrest.

former philippine president akeno was the first woman president of the philippines. ended a dictatorship of ferdinand marcos and fought off coup attempts. she was fighting off colon cancer. she was 76. those are your top stories right now. back to you, rick. >> rick: caroline, thank you very much. it's been a tough stretch for the auto industry around the world. sales are slumping and cash bailouts passed around and now, there's word of a huge honda recall because of potentially deadly air bags. we told you about this a little while ago. george is an auto industry analyst and he joins us with more now, about what the latest recall could mean for the auto industry as a whole. and first of all, this has to do, as we mentioned earlier, george, with these pieces of metal coming out of these air bags. i mean, it sounds awful. it just sound terrible. what does this mean for honda? >> well, like you said, it

seems to be a malfunction in the driver's side air bag system, inflater, that produces extensive internal pressure and the air bag ruptures and loose fragments of metal flying through the car and i've seen a description of some of it as sfl schrapnel. what it's done, it's a watershed year for the auto industry with sales slumps and the problems we've been having and what's happening, interestingly, the benchmark for quality was only like honda and toyota and interestingly enough, both of them, toyota in the last couple of years has a lot of quality control programs and lots of big recalls and now, honda, and what's happening is because the conventional wisdom about car quality safety is actually changing and for a change, now, ford, for example, is getting great marks for quality and general motors is generally improving and we're seeing, you know, we're seeing toyota and honda

having problems. so, it may-- it may-- >> and to translate, when does that translate into some sales? some money for these ailing u.s. car makers? now that their quality ratings are going up? >> well, you know, it took-- the truth of it is, the low ebb of u.s. automotive quality was probably 20 years ago and it's taken up until now for americans to, you know, rethink the situation and take a look at american cars and took at quality more seriously, so, again, everything right now is part of the general economic environment. and until, you know, people feel more comfortable and have-- with the employment and finances and they're not going to be ogg ought and making purchases. of course, now we're seeing with the cash for clunkers program an enormous pentup demand for buying and as long as up the department of the is coming up with--

government is coming up with $4500 to support the purchase everyone seems to be into it. again, the whole landscape of the automotive industry worldwide is changing. not just the u.s. auto industry and the tradition al asian auto industry, but for example, now hyundai and kia, from korea, are making huge advances and we're seeing a lot of-- a lot coming out of south asia and china. so it's going to be a whole different world than the automotive industry in the next couple of years. >> rick: interesting perspective from george, an auto industry analyst, thank you very much for your time, george, good to talk to you. >> no problem. >> jamie: and free health clinics across the country have seen their patient load increase by as much as 50%. experts now are preparing for millions more americans to visit a free clinic sometime this year. that's what they expect. laura ingle has the latest on the health clinic influx.

hi, laura, it sounds like people might not be able to get everything they need. is that what you found? >> well, what we're finding here, jamie, is that the record unemployment numbers translates to a growing population without health insurance. officials estimate that up to 8 million patients will head to a free clinic this year, a large group of them will be people who had a job a year ago and never thought they would be in a position to need this type of free service. now, the medical centers are privately run and receive little federal state funding if any. they're run solely by volunteers, but as millions turn to the free clinics, there's a new problem. funding has dropped dramatically, approximately 2 20%. >> free clinics rely on community support. we are the communities answers to the health care needs. so, we received very little state or frl funding. we rely on grants, foundations supports and obviously, community donations. >> now, not everyone can use

these centers though. in order to qualify, you need to be uninsured, low income and depending on your state, must live in the area. we visited an amayor carefree clinic, they provide chickups, monitor diseases, help them get lab work done and provide prescription drugs all at no cost. the places we called to call the clinic a god send. >> i probably would be able to pay my mortgage or electric bills and as i mentioned we're having a hard time paying those right now and trying to keep our heads above water. just the medication alone is saving me $150 a month. >> so, a doctor at the clinic says the centers are saving a lot of money and not only for patients, but saving a lot of strain on the system. and some patients were treated they would likely end up in the er. so, it is a situation we are continuing to monitor, jamie. >> good thing. thanks, laura.

>> this is a fox news alert and something you don't hear often, a rare earthquake has given folks in tennessee a roughly this morning. the u.s. geological survey that's that 3.2 magnitude quake happened at around 9:30 of the this this morning, a few miles from the tennessee north carolina border and it could be felt in north carolina and georgia as well. normally earthquakes less than 3.5 are really usually not felt, but people there felt these vibrations this morning. again, a rarity in this part of the country. you don't typically hear about the earthquakes there. >> jamie: it's frightening. >> rick: it is. there aren't any reports of injuries or damage. >> jamie: good news there. >> rick: all right. >> jamie: meanwhile. >> rick: meanwhile the final countdown for the space shuttle program has begun. with a handful of missions left, what is next for space exploration? >> we sure had a picture perfect landing this week and we are going to show you the rocket that nasa plans to replace the shuttle and ask astronaut tom jones why not

everyone is on board with the planned future mission. stay with us.

>> welcome back everybody. topping the news right now. the house is ready to take health care reform legislation to a vote, but the g.o.p. is slamming the health care overhaul proposal in today's weekly g.o.p. radio address. in fact, south dakota senator

claims that the plan will not actually improve care. claims it will force millions of americans into a government-run system and one of the main terminals at new york's laguardia airport was evacuated earlier this morning. it was terminal c which houses american airlines and it had to be emptied after a man went through security. he was carrying a suspicious bag, turned out he said he was carrying a fake bomb. the man was arrested and the terminal was opened and everybody is okay. five more banks have failed and brings the total number of bank failures nationwide this year to 69. that's compared to 25 last year. and the fdic, which insures your bank deposits, they are expecting u.s. bank failures to cost the insurance fund as much as 70 billion dollars through the year 2013. >> the space shuttle endeavour is safely back home and glided in with a perfect landing in florida yesterday. did you watch this? >> but if nasa continues with the current plan, the number of shuttle landings were drop to zero starting next fall.

the obama administration is reviewing the future of the shuttle program and phil keating takes a look at nasa's immediate future. >> president obama's augustine commission set to review exactly where nasa's future space flight stance prendz option toss president obama by august 31st, some in current budget restraints and some will be beyond, but they will include returning to the moon and also, going to mars. the constellation program replaces the shuttle fleet which is set to retire next year, the aries one rocket will carry the orion capsule into space and can have four 0 s or six astronauts to get to the space station and hook up with a lander and then get to the moon. it's now been delayed from august to halloween. engineers say the models show that the rocket design may shake too violently as it goes up, but engineers say all issues with the aries one remain solvable.

the aries five will be the largest ever for nasa and take up heavy cargo to the international space station and put the lunar lander into orbit. with the issues, the obama administration suggesting possibly extending the had life span of a space shuttle fleetment beyond 2010 as it's currently set to retire and possibly, with one or two missions, up to the year 2015. all of this will have to be weighed out by the bomb administration which right now has cut nasa's budget by 26 billion dollars. in cape canaveral, phil keating, fox news. >> jamie: so is extending the life of the shuttle a viable option? there may be an important safety factor to consider. we wanted to talk to tom jones about it. he's joining us now, he's a former nasa astronaut, a space walker, author of the book you must read "planetology". hi, tom. >> hello, jamie. >> jamie: first of all, tell me a little bit about the

meeting that went on this week and how do astronauts and former astronauts feel about what is being considered? >> well, one proposal in the public meeting of the augustine panel this week is to extend the life of a shuttle to minimize our reliance on letting space seats from the russians over the next few years after it retires and support the operations of the space station and i free the space station needs to be supported and we need to get people up there. you need to look at the cost. if you extend the shuttle program 3 to 4 billion a year, money spent on testing a successor, but extends the risk period for the astronauts to climb onto the shuttle. there are seven missions left. we lost the columbia in 2003 and of course, there's no escape system on the shuttle for astronauts during launch and landing so in my view, it would be smart to retire the shuttle on schedule and use the funds to accelerate the development of a successor and i hope the white house will actually bump up the nasa spending to accelerate the arrival of orion and the aries

rocket e how far along are those in terms of production? do they have all the capabilities that the space shuttle has in terms of maintaining the space station? >> well, certainly, the-- a new orion capsule won't have a big cargo bay to haul heavy cargo to the station, but those future cargo shipments to the space station could be done commercially and via other partnership rockets. so that's the question here. the question is really, you know, do you have a safer, more economical vehicle coming online and the aries first manned test flight and the orion in 2015 if fund something provided to it by the white house. i think we can get over the gap after the shuttle retires. it's embarrassing we have to buy seats from the russians especially how we celebrated how we got to the moon first and now we can't get into orbit on our own and the answer is to get the replacement along as quickly

as possible. >> jamie: tom, before i let you go. you know i'm a space nut, love to watch the launches and landings and would love to go to space. what about civilian seats in the future, how far awar are we? >> that's an important part of our future in space, jamie, first we will have commercial sub orbital travel, and that will cost about $200,000 a ride on the new-- galactic one of the competitors in that field. the important element of the commercial sector, that will provide cheaper more economical cargo shipments so nasa can get out of the trucking business and send that business off to future ups or fed ex firms that will ship things like water, food and fuel up to the space station. >> jamie: i'm looking at rick because i was looking at the video and i hope that's not the cargo hold, it will never fit my baggage, but i hope it happens and i hope the funding is there. tom, always great to see you, thanks so much. >> air welcome, have a great weekend. >> rick: i'm a light

traveler. >> jamie: to space you never know what you need. >> rick: how about the japanese astronaut that wore the same pair of underwear. >> jamie: that's not going to happen. only seven more missions before nasa retires it. take a long the dates are tentative of course, the next one scheduled for august 6th. less than a week away and after that, launches scheduled for november, february and march in 2010 and most of these missions involved carrying parts and cargo to the international space station and if everything goes according to plan, the last shuttle mission, number 134 will launch next september and that meets the deadline. >> rick: i'm glad you can't go to space yet because we have another hour and ten minutes together. >> jamie: i'll stick around. >> rick: another story coming up. we've known it as the swine flu, but told to call it the h1n1 virus. we're hearing it may be stronger and dangerous than first predicted and it's not even flu season yet. >> jamie: no, two shots for

us may be coming up and we're also going to have a live report, tracking the h1n1 virus and we'll tell you about a group of kids that ran into trouble in china because of it. xxpx my name is chef michael. and when i come home from my restaurant, i love showing bailey how special she is. yes, you are. i know exactly what you love, don't i? - [ barks ] - mmm. aromas like rotisserie chicken. and filet mignon. yeah, that's what inspired a very special dry dog food. [ woman ] introducing chef michael's canine creations. so tasty and nutritious it's hard to believe it's dry dog food. chef-inspired. dog-desired. chef michael's canine creations.

>> and topping the news right now. a key house panel is voted to approve a major health care reform package and this will pave the way for a possible full house vote in september. but during the august recess, house democrats intend to sell the health care bill to the publicment while republicans operate other hand, intend to gin up opposition to the plan. and three american hikers in iran after possibly straying into an iranian territory and hiking along the kurdish

border. officials i saying that the three contacted a colleague and said troops have surrounded them. and vice-president joe biden and other senior administration officials twell, they're all meeting with cabinet members today to discuss how the first six months of the obama administration have gone. the president will not be at today's meeting. he's at camp david for the weekend. >> well, the h1n1 swuine flu is responsible for giving oregon students a trip to china to remember. the group left hyped 12 students who were all under quarantine in china. chinese government quarantined the group after two students tested positive for h1n1 three weeks ago. saying they will be allowed to leave once they test negative for the virus and the c.d.c. continues to be on high alert amid fears of the spread of the h1n1 flu strain. mary anne silber is live in

atlanta with the latest on this, hi. >> hi, rick, c.d.c. officials announced earlier this week, they expect the number of swine flu cases in the fall to far surpass even what we saw in the spring, fearing when kids go back to school we'll see rising cases. last check, 353 people have died from swine flu here in the u.s. so far this year, more than 5500 hospitalized and now, the military is seeing a rise in the number of cases. military personnel, like those kids in classrooms, are in close contact with each other. working and often burning together, already than 2300 swine flu case haves been confirmed in active duty and military troops and those are much higher when you count in the family members of the troops and it's over 3800 people. so, the military is now taking steps to prevent the spread. they're doing things like asking troops to sleep head to toe and also, move their bunks away from each other in order to keep them from being so close together and also, the c.d.c. is racing to try and find a vaccine.

they're expected to have 40 million doses by september and another 120 million available by mid october because there really is urgency to get it out since kids are going back to school and of course, now with the military, they have also said that they are going to help provide any kind of resources that health officials need as far as testing and getting those vaccines out to people once it becomes available, rick. >> rick: all right. thanks very much. the internet search giant google can lead you everywhere you want to go, just about any subject on the internet. . >> jamie: it's true. >> rick: just about every day. >> jamie: do you wonder if google knows too much about you? you would be shocked, we think and what some people are saying about what is happening with your e-mails. you've got to hear this one.

>> this is a fox news alert. car giant honda is recalling

more than 400,000 cars because of an air bag defect that may have killed one person and injured several more, the popular models, the according civic and acura tl sedan. and honda does not want owners to panic so they're telling everybody to go online, check out the website and see if your car is covered under this recall. but also, wait until you get a notice in the mail because the car maker will be sending out mailed notices to cars that are affected. well, google may be a lot of people's favorite way to search the internet. in less than a second it can find information on pretty much everything you can imagine, but there are new concerns that google may know too much about everything, including you. dan springer has the story. >> google wants all the world's information from books to bone scans, charlie of seattle found out that even e-mail was fair game. after writing a colleague about a possible job in

macedonia he reopened the g-mail account to find an ad for cheap air fares to macedonia. >> it's creepy. somebody is reading the content of my e-mail to discover what i'm talking about. but some see the online snooping as a trade-off for free services or a way to save money. >> in the beginning, how do they know i like to travel to mexico, things like that, but over the course of time i kind of got used to it and the deals that came in through it helped me out. >> google maps can figure out where you live, where you like to eat and track you while driving and the feature street view allows users to see neighborhoods as if they were driving down the road, with one big difference. the zoom of the spot in downtown seattle and nobody bothered that we're shooting video, but google street view has been taking heat for allowing web surfers to peek into people's homes and lives and they blur faces and license plates before posting the imams, but the unedited

versions are alive and well on internal servers. >> google knows more about us, it has a greater ability to control our activity, to try to direct us to things that google wants us to do. >> this is basically, all done by computers, there are no humans who ever read this and this is the same technology that's also used for-- >> google's privacy policies are smelled out on its site and many in congress say they're not adequate to protect the google nation and may be coming down the web. dan springer, fox news. >> rick: in our second hour with more bad news for the auto industry. welcome to america's news headquarters. live from new york city for the next hour, i'm rick folbaum. i'm jamie colby. we want to tell you more about honda's extensive safety recall and we'll do that in a moment, but we start with washington's big push to pump

up car sales and energy efficiency and it's the cash for clurpge clunkers program, a dried up as quickly as it started. caroline shively has more from washington. hi. >> hi, jamie. two days ago the transportation department thought they had plenty of money left for the cash for clunkers program, but it turns out the system set up for dealers to submit the paper work online is so swamped it only showed 1/10 of the interest. civilian dollars supposed to last through the fall got run through in a week and made dealers panic because they paid off the rebate on the spot and don't get reimbursed by the government until later. dealers worry they might be on the hook for the money, but the white house program says it will run through at least tomorrow. yesterday, the house rushed to put another 2 billion into the program, the senate takes it up next week. and senator john mccain plans to filibuster it though because he and other fiscal conservatives say it's just another government handout and it's a billion dollar to the economy. how is the rest doing? on friday, the department of the reported that the economy

contracted about 1% in the second quarter and that's better than the 1 1/2% that's predicted and in his internet address released today the president warned the monthly jobs report out next week, will show the country is losing far too many jobs, but the president's take is rosier than some economists. >> history shows the need to have economic growth before you have job growth. in the report yesterday on our economy is an important sign that we're headed in the right direction. >> the rest of the world is still in recession. and as long as they're not buying our products, as much as they were, our recession is going to continue on, so, this is already really long one, really steep. >> the markets like what they're hearing though. this is the best for the markets in two decades. jamie? >> thanks so much, caroline. more, on that honda recall we told you about now. take a look at the models that are affected by the potentially deadly air bags we mentioned. they include certain 2001 and 2002 accords, 2001 civics, as

well as some 2002 and 2003 acura t lchl sedans. honda explain it this way. they say the problem is the driver's side air bag inflation device. it may burst if there's too much air pressure and that could send metal fragments shooting through your cars. so far, there's been one death, several injuries attributed to the defect and honda is asking you to go to their website for more information. >> in other news today. laguardia airport in new york is back open after a bomb scare forced it to shut down parts of the airport for three and a half hours today. one man was taken into custody after police found a fake bomb in his bag. authorities described the man as emotionally disturbed and dru drunk. officials are working with airlines to reroute passengers who missed their flights, but there will be delays all day long because of this. and a looming government shutdown, as residents in alabama's biggest county scramble to get things down

before a quarter of county employees go on unpaid leave. it starts on monday. reporting now from jefferson county, fox's ashley knicks has more. >> 5:45 a.m., a line formed at the homeless satellite courthouse, a couple of hours later, this, a line wrapped around the building. gary johnson walked to the courthouse to stand in line before the facility was no more. >> this is the worst i've ever seen it. i'm almost ashamed ato live her because it's so bad. >> less packed, but a line inside, jeffrey dunn waited for three hours, dunn says it wasn't the waiting that was painful. >> i feel sorry for the people who are not going to have a job tomorrow. really, that's my point. >> in forest hill the lines snaked around four times inside. those waiting say it was out the door at the start of business, sail davis only waited an hour, says the chaos is absurd. >> it's good for the citizens. and we're paying the taxes and

you know, it's just different. they should point a way to make things better. that's what they're paid for. >> davis stopped at forest hill only after seeing another location. >> in center point it was crazy, i couldn't stop there because people were standing outside with the umbrellas. >> she was right the. look at the line inside. roger finally at the front of the line at 1 p.m., got there before 8 a.m. >> this is the last day here and nobody put any consideration into the people that have to pay the taxes or car tax, and let them suffer through the agony. >> linda jones got a chair and was dragging it through the line. . >> this is ill, very ill-prepared for, i'm not able to stand five hours and. >> with om three county employees working at the center point location, the confusion and wait times were unbearable. angela moss took a seat.

>> i'm sitting down. my feet is hurting, i'm sitting down, my feet is hurting. >> that was fox's ashley knicks reporting >> there it is, you know, fox news reporting we're all over the health care countdown. there's still a lot of ground to be covered before a health care reform bill could pass in the house, but there were late night meetings and markups. molly henneberg live with the latest. >> hi, jamie, hi rick, this is the last of three bills that had to pass three different house committees and this one passed ever so narrowly. 31-28. now, house democratic leaders will have to figure out how to meld the three bills into one and get that to a floor vote in september. president obama calls the passage of that final bill out of the house energy and commercial committee, a historic step that puts the u.s. closer to health care

reform than ever before. there you see the first family today, going to marine one, on the trip to camp david. but not all democrats were on board. five of them on the committee voted with all of the republicans against the measure and democratic leaders say they may not be able to keep their caucus together for a final floor vote either. >> we may not get every democrat. and i don't think the republicans will be able to hold all of their members either because some of their members are going to want to vote for this health care reform bill, but we are going to do the best we can, working with our leadership to get a bill that will pass when we come back in september. >> the house legislation will require all americans to have health insurance and would raise taxes on business that is don't provide for employees, in addition, it would set up a government-run health insurance plan that republicans say will drive private plans out of business.

. >> americans don't want to lose their high quality health care and they definitely don't want to pay trillions of dollars for a government takeover of health care that could lead to the same denial, cl delay and rationing of treatment we've seen in other kupts that have gone down this path. >> now, the push begins with constituents. both republicans and democrats will use the five week summer recess to go home and try to build support for or against this legislation. rick and jamie? >> molly, thank you so much. >> well, free clinics, across the country, has seen an uptick in the patient load. this as funding a dropping off. laura ingle live in new york with the details on this, laura? >> and rick, you know, record unemployment numbers also means a new population without health insurance, there's been a 40 to 50% jump in patients have issing free clinics nationwide this year. the combination, not a good one, according to those in the medical community, which has left many working on ways to

balance this all out. now, all the doctors, nurses and physician assistants at the free clinics are volunteers. they provide everything from checkups to lab work, x-rays and even provide prescription drugs, which usually amounts to overwhelming bills. these types of clinics serve uninsured low income patients that live in the area. >> you know, financially, we're teetering on the edge. we're about being, basically, sunk and so then they took care of that for us and basically probably would be homeless right now if we had to pay those bills. >> and in year, experts say up to 8 million americans will visit one of the nation's 1200 free clinics this year, while more americans are turning to the centers for help, funding nationwide has dramaopped a dramatic 20%. >> i hate to sound melodramatic, but i think it's the difference between life and death for a lot of our patients.

it's not just the patients with chronic diseases, it's the patients who come in and have delayed care and have a lump or a bump. >> well, the concern of course is that the demand for free medical care will far outweigh the ability to provide services to the neediest of americans, some who run the free clinics say they're getting creative, having to, cutting up the heroes and patient load to even out the workload where they can. rick. >> laura ingle in our news room. thanks so much, laura. a fox news alert in iran has detained three american tourists who they say crossed into iranian territory while hiking. david piper is live on the phone from tallil air base in iraq, not too far away. david, what is the latest with these three americans? >> hi, rick, well, what we know at the moment is that iran's state-run media say these three were arrested friday off the kurdistan, and

we've seen some reports that says they crossed the border, they doesn't know they crossed the border and even managed to contact their friend presumably by phone to say they had been surrounded. now, the state department is saying now that they know about the situation and they're monitoring it, rick. >> rick: so, david, i guess this is always sort of diplomatically dicey when dealing with iran. why would it be more diplomatically sensitive right now? >> well, yes, of course, we've got the very controversial election with tehran accusing the u.s. of meddling in it, which washington denies of course. and also, this nuclear agenda and the tension because of that. and these tourists walked right in the middle of it, ri rick. >> rick: david piper on the phone now from iraq in the region. david, thank you very much.

well, trials begin today for opposition supporters in iran that have been detained since the country's disputed elections back in june. bo 20 protesters are expected to be prosecuted, long them some arrested for allegedly sending pictures to the media that showed violence waged on those protesters. iranian media reports that the prominent moderates are charged with trying to topple the clerical establishment and acting against national security. it's a charge that could carry the death penalty. >> and we want to update a story we told you about in the last hour. the last radio stations ordered to be shut off went off the air today. after the officials revoked the low pressureses-- they shut down. the latest restrictions adding to tensions between president chavez and the private media. the government citing the station's failure to renew their registration as the reason for the shutdown. and u.s. foreclosures say

they've successfully kept the missile defense system. the defense has held thursday off hawaii. it was a short range ballistic missile fired from the iesland and shut down by an interceptor missile from the u.s.s. hopper. last month north korea violated sanctions by test firing seven ballistic missiles. missiles. >> one of the most talked about person during the republican party's summer meetings going on in san diego is on the other side of the country. in fact, just left for camp david. chief political correspondent carl cameron reports that republicans are coming together in their opposition to the president. >> we've got-- strategizing in san diego, g.o.p. big shots say their outrage. >> think about all the crap we've taken from the press and some of our own. >> they voted to officially dub health care reform with a costly public option, obama care, quote, obama care will

be government control of the health care sector in addition to the federal government's direct control of banks, auto manufacturers, insurance companies and mortgage industry. randy moolen is the g.o.p.'s national treasurer and an arizona small business man. >> health care is 1/6 or even more than that of ouren tire economy and for the government to run 1/6 of our economy, doesn't make any sense. >> rnc launched health care atta attack ads and 61 health care during the august recess against fiscally democrats, including the so-called blue dogs who say they oppose the government take over of hk and some wavered through pressure and the white housement don't have the ka hone nays to stand up and represent the american people. i'm looking at you and telling you we're coming after you. >> and voted to pan the president's climate change vote. cap and trade falls on hard working american families and cost of the tax greatly exceed

any benefit especially in this time of economic crisis and they slammed the president's appointment of czars, not subject to congressional confirmation as abuse and violation of the power of the president and demanded congress defund them. finally, after a rocky start as chairman, michael steel seems to have made peace with g.o.p. critics and some pr proposed limiting power over the money and went with a tradition traditional co-founder. carl cameron. fox news. >> . >> jamie: right now, president obama's cabinet is gathered for a second day at the blair house in the nation's capital, and they're trying to sum up how things are going and what's to come. and how is the administration doing in the six month mark? a fair and balanced look now with the former head of the dukakis head of the campaign, susan estridge is joining me and president george w. bush, and he's here.

great to see you both. >> thank you. >> jamie: brad, susan, good so see you as well. it's not a report card and it's not a-- just a correction, they're taking a look at what's going on. what is it? why are they getting together and the president isn't there, it's the vice-president. what do we expect? >> well, that's the real trouble there, you have joe biden running the show and the president at camp davidment and having said that, look, you know, things are not well in this white house and they're not going as planned and obviously, they're circling of wagon to try and get things back on track and they passed the stimulus bill and they promised that unemployment with a not rai raise-- would not raise over 8.5% and creeping up to 10 in urban areas, 14%, legislators are reading, they're not reading bills and billions are being spent. cap and trade, another disaster for them, and health care, the president thought he'd have the health care bill before the recess and he's not going to get the health care bill in the fall. so, look, things aren't going

well, they're circling the wagons, we need now as republicans to take advantage and tell the american people the truth. and that is that taxing and spending are never works. >> okay, susan, i want to let now here and ask you this, the president says he doesn't care about phone numbers and that's not how he makes his decisions, but they're slipping. how did he do on health care? >> oh, i think we're still in the middle of this story, jamie, i personally believe that the bills we're hearing about now are not going to be the ones that end up on his desk. i think ultimately we need a bipartisan bill that's probably a little more limited than what the democrats are talking about because that's what really most people want. but, you know, the interesting thing, i have great respect for brad, but i just don't hear the republicans saying there's anything they're for and until they get asked, saying what they're against and start offering people

something. barack obama is the only game in town. >> well, susan, let me tell you what we're for. >> jamie: susan, quickly-- brad, go ahead, brad. >> let me tell you what we're for, we're for privatization, we're for the private sector running our economy, not the government. we're not for growing government and not-- >> and a grate job of it, brad. >> we have 52 stra 2 straight s in a row-- >> i don't think anybody is going to have socialized medicine. >> jamie: sorry for the delay. there's a lot of people out of work who need health care coverage. unemployment is going to go up. he says there's an up tick in the economy, but who knows if it will hold. what about the fact that they now don't have a health care plan before they went on recess? >> look at this-- >> oh, jamie. >> go ahead, i'm sorry. >> jamie: well, let me-- >> never realistic to have o one. >> jamie: but he set a deadline. >> brad you're on. >> jamie: to come up with it, brad, what happens from here, what's next? >> well, the president is

going to do as much star power, which is eroding in the polls torques try and get something passed. let me tell you something. when the representatives go back to their districts they're not going to be hearing about health care, they're going to be hearing about the economy, the jobs and being able to put food on their table. that's what concerns us. >> jamie: all right, brad blakeman and susan, it ties together. no question about it. thank you. >> thank you. >> jamie: rick. >> rick: port authority officials in new york have identified the suspect in this morning's bomb scare at laguardia airport. authorities say the man hyped the thre behind the threat. 32-year-old scott mcgan of new york, alleged to have walked into the c terminal with a fake bomb leading officials to evacuate the entire terminal causing major delays and hassles for travelers, no word yet what kind of charges mccannes would face. we've heard the debate what

the reform on health care would do for the economy, your taxes and insurance premiums. >> jamie: no doubt about it. what about the doctors in small private practices. you won't believe how many of them are thinking about quitting under the current system. we'll talk to a primary care doctors about what more bureaucracy will mean for him and his patients. i was always going having to go in the middle of traffic and just starting and stopping. having to go in the middle of a ballgame and then not being able to go once i got there. and going at night. i thought i had a going problem. my doctor said i had a growing problem. it wasn't my bladder. my prostate was growing. i had an enlarging prostate that was causing my urinary symptoms.

my doctor prescribed avodart. (announcer) over time, avodart actually shrinks the prostate and improves urinary symptoms. so i can go more easily when i need to go and go less often. (announcer) avodart is for men only. women should not take or handle avodart due to risk of a specific birth defect. do not donate blood until 6 months after stopping avodart. tell your doctor if you have liver disease. rarely sexual side effects, swelling or tenderness of the breasts can occur. only your health care provider can tell if symptoms are from an enlarged prostate and not a more serious condition like prostate cancer. so have regular exams. call your doctor today. avodart. help take care of your growing problem ♪ ♪ i got troubles, oh ♪ but not today ♪ 'cause they're gonna wash away ♪ ♪ they're gonna wash away ♪ ♪ ♪ they're gonna wash away

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>> the top stories, iran say three americans are accused of straying foo iranian territory during a hiking trip and americans refused to heed the warnings from border guards and the ensoy has confirmed

the tourists are in iranian custody and the associated press say they were tourists who mistakenly crossed into iranian territory. one of the main term false in laguardia back open after a bomb scare, it was terminal c where american airlines is. a man came in with a suspicious bagment it's 32-year-old scott mcgan and the terminal is reopened. the cash for clunkers program will last through the weekend. only took a week for the program to blow through thnearly all of its one billion dollar budget and the trade in deals have overwhelmed suddenly booming car dealers and the senate has not yet voted, but the house says weekend deals were still valid. >> as congress departs for the summer recess weeks want to hear from you, do you think it's appropriate for members of congress to take a month long recess in august or should they stay in washington

to work on health care reform. 34% of you thought they should stay and work. 66% of you thought members should head home for a recess and you can head to our show page, foxnews.com/america's news hq for head quarters to cast your own vote. we report, you decide. meantime, health care reform and how to pay for the trillion dollar overhaul, it continues to hold almost all the attention on capitol hill. how would reform impact primary care physicians, a recent study, primary care suspicions are overextended and half of thinking about leaving medicine altogether. dr. peter anded is a primary care physician, the founder of the team care physician. i'm so glad you're here, you're on the front line of these things and i know that you give your patients excellent care, but i'm wondering, what part of the system as it is right now prevents you from doing things for your patients that you would like to? i guess what i'm getting at is

what needs to be reformed in your view? >> well, i guess to really understand the situation, you've got to understand the family medicine is in crisis and it all really started around 1994, with the managed care change in health care, when family physicians got more administrative responsibilities, more documentation requirements in the face of increasing medical needs to the patients. and all this in a decreasing rei reimbursement environment. this led to a great strain on family physicians and general int internists and therefore the closure, 60% primary care physicians would lead primary care if they could and we've had a 50% decline in the number of u.s. medical students choosing primary care. so, really, that the big picture primary care is just increased workload and decreasing reimbursement that all physicians have to address

in one way or another. >> rick: so what would you like to see happen? we don't know what kind of legislation is eventually going to come from these negotiations and plans that are being formed in various committees, but when all is said and done, what do you think is the biggest problem? i'm hearing a lot about the insurance industry, the democrats are going to go on this pr offensive over the next few weeks to talk about how it's the insurance companies that are the villains here, are they? >> oh, i would say absolutely not. i believe that the united states health care system is disorganized. it's fragmented, and it's wasteful, but that's not the insurance company's fault. it's taken its toll in patients, due to lack of-- i mean, lack of accessibility to care, increased costs and decreased quality, but the real problem is the fragmenttation, america has the best doctors in the world and the best medications in the world. but our system is fragmented. and by that i mean, you have

four major components of our system and the primary care physicians, the specialists, the emergency rooms and the hospitals. and these systems are not coordinated and integrated. this leads to a lot of wasteful, unnecessary care and defesicient care. this fragmenttation is the core of the tremendous cost and outcomes we do experience with the best physicians in the world and the best medications. so, if you really want to fix health care, you fix the fragmenttation part of it. not change the positions or the government takeovers, basically positions can fix this themselves. >> i'm so glad we have he had you on today. seems like all we've been hearing from are the politicians, it's so nice to talk to a doctor about this very important subject and to hear what you have to say, dr. peter anderson. thank you so much for your time. time. >> and there's some news from the sporting world just into fox.

olympic gold medallist michael phelps has swam a stunning comeback at the swimming championships in rome, italy to break the world records for the 100 meter butterfly, he held the title before and now again. when he saw his time he hopped up on the lane row from the former record he holders, threw up his arms and let out a scream toward the united states cheering section. >> rick: wonder what bathing suits. there was a flap about the bathing suits worn in rome. the c.d.c. issuing a warn for pregnant women regarding the h1n1 season, everybody is concerned. >> jamie: that's true and fox is tracking the h1n1 virus, a live report, that's next. my doctor told me something i never knew.

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>> welcome back. after almost stalling out the cash for clunkers is getting a cash reboot and it's the bottom of the hour and caroline shively. >> the house approved two million dollars addition al dollars for the cash for clunkers rebate program and the senate needs to take up the measure, but the white house says that the deals made this weekend will count no matter what. a key house committee passed its version of the health care bill last night before the legislative body left for august recess. a full house vote is expected in september.

the senate finance committee need to produce a bill, but they can vote. that is expected september 15th. iran state-run television reports the security forces arrested three americans. the group may have strayed into iranian territory as they hiked along the border between iran and the kurdish region of iraq. the state department says it's looking into the matter and a kurdish spoke person says shaun gabe breen maxwell, shane bower and sarah short. a woman known as icon of democracy passed away. former fill ponyphilippinfilipi aquino, she ended the dictatorship of marcos. and yesterday the white house released a statement on her death saying in part she played a crucial role in philippine's history and ruling the democratic rule from her people power moments over 20 years. she suffered from colon cancer.

she was 76. those are your top stories right now. . >> rick: the h1n1 swine flu is responsible for giving students on a trip to china from oregon a trip to remember. they landed in the u.s. yesterday afternoon, but had to leave behind 12 students. they're all under quarantine in china. the chinese government quarantined the group after two students tested positive for h1n1 three weeks ago, saying they will be allowed to leave once they test negative for the virus. the c.d.c. continues to be on high alert on the fears of the spread of the h1n1 flu strain. mary anne silber is live from atlanta with the latest on this. >> we received a warning from c.d.c. foreclosures this week that we could see higher numbers of cases in the swine flu in the fall than the swing as kids go back to school and now word from the military that they are seeing a rise in cases and military personnel just like children in classrooms often come in close

contact with each other, and they work and often bunk together and already more man 2300 cases of swine flu have been confirmed in active duty troops and those numbers are higher when you add in family members of active duty troops and then it's over 3800. so the military is taking steps to prevent the spread and sleeping head to toe in bunks, to avoid coughing and sneezing in their faces and increasing space between bunks, the military agreed to provide troops as well as medical resources for h1n1 testing and help to distribute vaccines once those become available. last check, 353 people have died from swine flu here in the u.s. so far this year. more than 5500 have been hospitalized. the c.d.c. is racing right now to develop and distribute a vaccine by the fall and they hope to have 40 million doses available by september. and another 120 millidoses available by mid october and health foreclosures say they may start distributing the

vaccines before the clinical trials are finished, rick. >> rick: mary anne, thank you very much for that. congress just on the almost stalling the cash for clunkers program upping the total available for fuel efficient car subsidies to 2 billion dollars. is this the best way to tune-up the economy? joining us now is the ceo of d.c. asset management, david nelson. good to see you, thanks for being here and now what, it looks like finally a good time to be in the car business, right? >> it sure does, maybe the deal is a little too good, but you know, it looks like shoddy paper work and some computer glitches, really caught the administration off guard. and they were getting some critical information to show them how much the demand was. and frankly, dealers understandably were much more interested in selling the cars, rather than filling out the forms. and as a result, this really, it really kind of took off. >> well, you know, they're going to give it more money it looks like the senate has to vote on this next week, but i

know that you think the cash for clunkers program actually creates artificial demand, but what the fact that a lot of people probably wanted to purchase a new vehicle, but haven't felt as though they could afford it. all of a sudden, this program comes down the line, offering them a few thousand dollars and they go out and they buy themselves a car. this seems like a pretty good keel deal, no? >> well, it is a good deal and maybe this type of deal can have some effect, but like you said, it you just said it, it doesn't spur real organic demand and i think the real issue here is that now the administration has opened up pandora's box and you're going to see a political backlash, quite large, as every union, every industry marches on washington and asking for the same type of deal as the auto industry and what's next? cash from worn out clothing to help the apparel industry or how about cash for aging corporate aircraft, to help the sector. you can take this as far as you want to go? >> what's wrong with that,

david. what's wrong with that, if it helps the businesses keep employees hold on to jobs, those workers pay taxes on their revenue. what's the matter with trading in your old lawn mower or television set or used clothing as you said? >> i'm not saying there's anything wrong with it, but let's be about the costs? it isn't going to be 1, 2, 3 or 5 billion. it's 10 to 15 to 100 times that as every industry gets their handout. know in advance it's a huge tax for the american public. >> rick: you know, i want to ask you quickly, we have about a minute left. the stimulus package. president says that it's finally showing signs of working. we've watched the markets on the rise pretty steadily offer the last several months. what are you telling your clients when you look at the next six months or 12 months if you're giving your clients advice what to do. what kind of advice have you

given? >> i'll be honest with you, we were quite surprised coming off the low. we didn't expect the rally to sustain itself like it has. and i do believe that this point in time that we've probably saw you know, what some people have called a generational low back in march. and the movement has been unprecedented, but we're seeing some movement in the economy, but at some point in time, we have to taper off and digest some of the gains. this is good news, this is good news for the mamerican public and it does show that there's some things working out here, but let's not get carried away. we have an uphill fight. we're not facing armageddon, but we are in the middle of an uphill recession. >> rick: david nelson, asset management ceo, david, thanks for coming in. >> thank you. >> jamie: and today is the first day of august and investors, well, fingers are crossed and the dow jones industrials industrial average

will carry the july momentum into august. and at the close on friday, the dow was at 9,171. it was up almost a percentage point for the week. we'll take it. and more than 8 1/2% for the month of july. july was the fourth month in the past five that the dow finished ahead. stocks were up 4 1/2% since the start of 2009. but sadly, more banks are going under. drying up the fed's insurance fund to its lowest level in 16 years. it's a federal deposit insurance corporation, fdic, that insure your bank money and they're shutting down a total of five small banks. here is a map showing you where. new jersey, oklahoma, illinois, mutual bank of harvey, illinois, the largest bank to close. so far, a total of 69 banks had to shut their doors and the fdic insurance fund now stands at 13 billion dollars, the lowest point since 1993. >> rick: well, we talk about

the federal government getting involved in the auto business and in the banking industry, well, the government is also pumping millions of stimulus dollars into helping people cut down on energy costs by weatherizing your home. >> jamie: it's true, but is it worth it? i took a trip to pennsylvania to fiend out, other states, involved, too. see what i learned next. announcer: welcome to the now network. currently, thousands of people are enjoying the new palm pre from sprint. its revolutionary web os allows multiple applications to run at the same time. - ( thunder and rain ) - millions are using the simply everything plan. - each is saving $1200 over an at&t iphone plan. - ( cash register dings ) together that's billions of dollars. enough to open a dunkin' donuts in space. from america's most dependable 3g network. bringing you the first and only wireless 4g network. get the palm pre. only from sprint. only on the now network. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com.

>> topping the news right now. the cash for clunkers rebate program, we'll ask through the weekend if you're out shopping for a car and took a week for the program to blow through nearly all of its 1 billion dollar budget. the house was first to vote for additional 2 billion dollars to finance the trade-in deals that have all, but overwhelmed suddenly booming car dealers and the senate hasn't voted yet and the white house says weekend deals are still valid. laguardia airport in new york is back open after a bomb scare forced it to shut down parts of the airport this morning. a central terminal american airlines, port authority foreclosures say 32-year-old scott mcgan is in custody after a fake bomb was discovered in his bag and police are investing the disappearance of an idaho boy, missing for a week. they're afraid he may have been the victim of a tragedy. boise authorities say there are suspicious circumstances as they're calling them surrounding the disappearance of eight-year-old robert manuel. robert seen last near the

boise apartment of his mother. >> rick: he promised to stay in office and fight corruption charges, but instead hoboken's youngest mayor quit after only a month on the job. former hoboken mayor now, has sent a resignation letter to the city clerk, in fact, yesterday the 32-year-old was sworn in july 1st after winning a june runoff and caught in a federal corruption sting, accused of taking $25,000 in bribes in his resignation letter, he apologized to the residents of hoboken, new jersey. residents of jefferson county, alabama are preparing for a government shutdown. lines snaking around municipal buildings friday as people tried to settle tax bills and register their cars before county employees go on unpaid leave. set to happen on monday and the county has been on the brink of filing the nation's large e largest municipal bankruptcy for the past year. >> jamie: we have been

talking a lot about the stimulus dollars and millions, in fact, billions are going to weatherize homes, mostly to help people of lower income control their energy costs. but is this program ripe for fraud and mismanagement? fox news reporting, we went to both virginia and pennsylvania to take a look. here you go. >> juanita, having her home weatherized is a god send. they're going to help me a whole lot. qualifying under the federal weatherization assistance program meant new insulation, weather strips and a liner under her house. the money she saves on energy means she won't have to choose between paying her electric bill and buying her medication. >> i take about 22 bills a day, plus, insulin. and quite expensive. >> the energy department's efforts to reduce costs for low income family got a ten-fold increase to 5 billion dollars under the system husband program. >> to create tens of thousands

of jobs, it saves energy in each of those homes, it puts money back in the pockets of the home owners. and it makes those homes healthier and better to live in. but the drastic increase in funding has brought concern over accountability, both in the approval of low income am capitals and the contractors who do the weatherizing. >> there's a lot of layers to oversee and i expect to see a lot of waste and fraud and sheer mismanagement and inefficiency. >> you're getting four times as much money as you were getting previously, it requires much more internal management and we're not at this point comfortable that that's in place. >> other officials tell fox, new measure toss track the funds will be in place when they're needed. >> we already have systems in place, it's a matter of expanding the system. >> tracking the money is the furthest thing from juanita's mind. >> i feel good and thankful because i've had it pretty

rou rough. >> jamie: well, that home owner is doing well, rick, in virginia, but actually in pennsylvania, they've had some homes that have been weatherized twice and also' also concern about the contractors getting the work, whether or not they're qualified for being qualified and another example of so much money coming in from the federal government through the stimulus to the states and accountability concerns. >> rick: all right. great reporting, thank you very much, jamie. >> thank you, rick. >> rick: coming up, a how to manual from a terrorist organization. a taliban lead are releases new behavior guidelines, we kid you not, this is for the fighters, could it be a sign of weakness? >> we are going to tell you what they're trying to accomplish by doing that, what it could mean for the safety of our troops and whether or not the u.s. is planning to sit down and have talks with the taliban. what's in a triscuit?

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>> the question we're asking today is what should we make of the taliban. after they issue a new code of conduct for fighters. can proof it-- disagrees with its belief modify extremist behavior? joining me neil livingston. he calls this taliban light. great to have you with us. >> thank you, jamie. >> jamie: so, all of a sudden, the proclaimed leader of the taliban says we are going to change our ways and they issue a code of conduct, even including in this, what to do if you captured somebody. has anything changed? >> nothing's really changed and he has a section on suicide bombing, for example, and it says, suicide bombing is still moral, but we should only do it with, against high valued targets so that we don't waste our lives indescriminately. so, that's definitely a big

change. and in terms of captured infidels that describes u.s. and other coalition soldiers. he says, rather than executing them right away, it's up to him to make that decision right now. so, a lot of us think it's really an effort by mullah omar to take control or take greater control of the various elements in the taliban, particularly in afghanistan. >> jamie: yeah, it's interesting, i think, the timing of this with elections, happened karzai says he would be open to dialog for the tab and richard holbrook, our envoy says the same and i've read in my research that hillary clinton thinks it might be a good idea, too, secretary of state. what do you think. >> i think that we should keep the taliban on the fringes, they've had an opportunity to rule in afghanistan. they take their cues from the 8th century and they have no rights for women, they have-- it was a draconian state.:

and do we need to have a dialog with the taliban right now? i think it's worthwhile to say, look, if you want to surrender your arms and come in, we'll accept you, but i don't think we should have dialog with omar. we really have a score to settle with him and her taliban leaders for 9/11. >> jamie: no question about it. neil, before i let you go, is there any precedent for a group, a vicious terrorist group, especially as vicious as the taliban as reforming their ways and putting down their arms? >> well, actually there are several. one are the guerillas in uruguay and in colombia, both are very, very vicious group and ultimately did agree to compromise if the government did foreswear violence and the join the democratic process and there are 19 representatives in the colombian parliament today.

so, if they are really willing to do all the things necessary, requisite to give up their very draconian policies and their murderous policies. then, maybe we can have a discussion, but they have to demonstrate something first. >> jamie: for the safety of our troops, aid like to think it could happen. thanks so much, neil. nice to see you. >> nice to see you. >> rick: the department of veteran affairs will begin distributing tuition payments today to schools that are participating in the new g.i. bill. just in time for veterans of recent wars. the prm gives eligible veterans service members, reservists and national guard members the chaps to get a free undergraduate education at colleges and universities. the new bill is the first since the update to the g.i. bill and the first time it's been updated since 9/11, also coming up, what does a 23 million dollar home in south carolina look like? >> i can't wait to see it. there's one that's up for a sale. we are going to show it to

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>> if you're one of thousands of people to cash in your clunker, hyundai has a new car, first ever, may be something you'd like to consider. gary gas lieu takes the coupe for a spin in today's car reportments you may think that hyundai has the lowest car in america. the genesis coupe is the korean automakers first rear drive sports car, with a choice of 210 horsepower turbocharged 4 cylinder or 306 power v-6 starting at $22,000 on the verge of scoring another coup for the strong selling economy brand. last year they had a sedan and

now a rear wheel sports car. >> we're changing things, the quality is up, and safety rating is way up ap in the lineup, rear wheel drive performance is required for any true sports car and that's what the genesis coupe is, a sports car and brings in a whole new genre of buyer for us. >> it's loaded with standard features, bluetooth, radio connectionen makes the most noise on the road. both engines are available with a six speed manual or a auto mat tech trns tans significance and a sport tune suspicion, brakes, summer tires, limited slick differential and a real spoiler you can order with either the turbo or the six cylinder under the hood. the car drives well in all four combinations, but the v-6 track is probably the best. the engine cranks out the kind of growth you'd expect from just about anything other than a hyundai. and the suspension cars up the road like a champ disguised.

that's not to say that it doesn't look good, but some people suffering from brand envy may have trouble making the leap. until they get behind the wheel. >> the fit and finish may not be quite as good as the incontinuity or the nissan 370 z. on the front it will give those a lot more on the road for less money. >> it costs 23 million bucks, but you can own a piece of history. that price tag makes it the most expensive ever for a home in charleston, south carolina. ain't she sweet? the home is northern as the house located in downtown charleston has seven bedrooms and a carriage house and parts of the house dating back to the early 180's there's room for both our families, rick. >> rick: let's move it. that does it for us here in new york. i'm rick folbaum. for jamie colby. what's next. >> jamie: the journal editorial report. don't want to miss it, kee